Question

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August 2016, together with information concerning production, are as follows:

Work in process, August 1, 700 pounds, 20% completed				$ 3,479*
	*Direct materials (700 X $4.70)	$3,290
	Conversion (700 X 20% X $1.35)	189
		$3,479
Coffee beans added during August, 14,300 pounds				65,780
Conversion costs during August				21,942
Work in process, August 31, 400 pounds, 42% completed				?
Goods finished during August, 14,600 pounds				? All direct materials are placed in process at the beginning of production. a. Prepare a cost of production report, presenting the following computations: Direct materials and conversion equivalent units of production for August. Direct materials and conversion costs per equivalent unit for August. Cost of goods finished during August. Cost of work in process at August 31, 2016. If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to the nearest cent. Morning Brew Coffee Company Cost of Production Report—Roasting Department For the Month Ended August 31, 2016 Unit Information Units charged to production: Inventory in process, August 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Equivalent Units Whole Units Direct Materials (1) Conversion (1) Inventory in process, August 1 Started and completed in August Transferred to finished goods in August Inventory in process, August 31 Total units to be assigned costs Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for August in Roasting Department $ $ Total equivalent units Cost per equivalent unit (2) $ $ Costs assigned to production: Direct Materials Conversion Total Inventory in process, August 1 $ Costs incurred in August Total costs accounted for by the Roasting Department $ Costs allocated to completed and partially completed units: Inventory in process, August 1 balance $ To complete inventory in process, August 1 $ $ Cost of completed August 1 work in process $ Started and completed in August Transferred to finished goods in August (3) $ Inventory in process, August 31 (4) Total costs assigned by the Roasting Department $ b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to two decimal places. Increase or Decrease Amount Change in direct materials cost per equivalent unit $ Change in conversion cost per equivalent unit $

Answer 1

1 The cost of production report for MBC Company for the month ended August 31, 2016 is provided below:

MBC Company Cost of Production Report - Roasting Department For the Month Ended August 31, 2016 Equivalent Units Whole Units Direct Conversion Materials Units Cost 4 Units charged to production: 5 Inventory in process, be 6 Units started in current 7 Total units accounted for 700 14,300 15,000 9 Units to be assigned costs: 10 Inventory in process, be 1 Started and completed in current 12 Units completed in current 13 Inventorv in process, endin 14 Total units to be assigned costs 15 16 700 13.900 14,600 400 15,000 560 13.900 14,460 13,900 13,900 400 14.300 14.628 Costs Direct Conversion Total 17 COSTS 18 Unit costs: 19 Total costs for current 20 Total equivalent units 21 Cost per equivalent unit Materials Cost $65,780 14,300 S4.60 $21,942 14,628 S1.50 23 Costs assigned to production: 24 Inventory in process, be 25 Cost incurred in current 26 Total costs accounted for 27 $3,479 91,201 Cost allocated to completed and 28 partially completed units 9 Inventory in process, be 30 To complete inventory in process, be 31 Cost of completed 32 Started and completed in current 33 Cost of units c 4 Inventory in process, endin 35 Total costs assigned $3,479 S840 $840 S4,319 20,850 $84,790 $21,690 $89,109 S252 $2,092 21,942 S91.201 $840 $0 S0 $63,940 $63,940 $1.840 S65.780 work in process eted in current

Following calculations are used to prepare the cost of production report for MBC Company for the month ended August 31, 2016:

MBC Company Cost of Production Report - Roasting Department For the Month Ended August 31, 2016 Equivalent Units Units Whole Units Direct MaterialsConversion Cost 4 Units charged to production 5 Inventory in 6 Units started in current 7 Total units accounted for 700 14300 -B5+B6 ss, beginnin 9 Units to be assigned costs: 10 Inventorv in 11 Started and c 12 Units c 13 Inventory in 14 Total units to be assigned costs 15 16 700 14300-400 B11*100% -B10+B11 C10 C11 400 B12+B13 C12+C13 -B10*(100%-100%) |-B10*(100%-20%) -B11*100% -D10+D11 -B13*42% -D12+D13 eted in current ed in current -B13-100% Costs 17 COSTS 18 Unit costs 19 Total costs for current Direct Materials Conversion Cost Total 20 21 Total equivalent units Cost per equivalent unit 65780 C14 C19/C20 21942 -D14 -D19/D20 23 Costs assigned to production: 4 Inventorv in 25 Cost incurred in current 26 Total costs accounted for 27 3479 C19+D19 -E24+E25 Cost allocated to completed and 28 partially completed units: 29 Inventorv in 0 To complete invent 31 Cost of c 32 Started and c 33 Cost of units c 4 Inventorv in 35 Total costs assigned -E24 C10 C21 -C29 C30 -D10 D21 -D29 D30 -D11 D21 D31+D32 n process work in process -E29 E30 -C32 D32 -E31+E32 -C34+D34 E33+E34 leted leted in current eted in current ss, endin -C31+C32 -C13 C21 -C33-C34 D33+D34

The change in cost per equivalent unit for direct materials and conversion from the previous month is calculated below Increase or Decrease Amount e in direct materials cost per equivalent unitDecrease e in conversion cost per equivalent unit (S0.10) S0.15 Increase Following calculations are used to calculate the change in cost per equivalent unit for direct materials and conversion from the previous month Increase or Decrease Decrease 4.6-4.7 Increase Amount e in direct materials cost per equivalent unit e in conversion cost alent unit 1.5-1.35